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Updated about 3 years ago,

User Stats

24
Posts
9
Votes
Justin Gomberg
  • Long Beach, CA
9
Votes |
24
Posts

I live in one state, invest in another, and have tax confusion!

Justin Gomberg
  • Long Beach, CA
Posted

I understand questions like this allow for a broad range of answers. I will try my best to phrase the questions around my particular situation in order to receive more acute answers pertaining to my situation.  

I currently have a CA LLC because I am a CA resident and a foreign entity license in Ohio where my business currently transacts all business.

I currently only do Buy and Holds but will be starting my first flip soon and am curious how the taxation on a flip works in this situation. I will be grouped into the highest tax bracket (I am assuming I will pay short-term capital gains tax as well on these because I will not be holding onto any flips for over a year). The parts I am having trouble understanding is:

1. What taxes at the end of the year will be due in Ohio? 

2. Other than the annual CA LLC filing fees; what taxes will be due at end of the year in California if my income is from flipping properties in another state? (CA is one of the few states where I will have to pay the $800+ LLC filing fees annually regardless of where business is transacted because I'm a full-time resident of CA and they will get money from you any way they can).

3. Will the LLC end up paying short-term gain taxes if we flip multiple houses per year and do it full time?

4. What taxes am I subject to, and which state would it be owed to, CA, OH, Fed, and/or all? 

4. Do you recommend I have a tax professional to file our taxes in the state my LLC is domiciled in or a tax professional in the state we do business in?

I am having a hard time understanding how much to hold back for taxes vs paying myself/K1. 


Please let me know if you need more information and I greatly appreciate the advice in advance! 

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